Stocks fell significantly Thursday, as management changes at Bank of America and disappointing quarterly results from Microsoft concerned investors. Stocks had posted bigger losses through the early afternoon, but managed to recover somewhat as the session continued. At one point, the Dow industrials again fell below the 8,000 level. Analysts said former Merrill Lynch chief executive John Thain's departure from Bank of America added to nervousness about the leadership at the biggest banks and that Microsoft's earnings decline and job cuts confirmed that the recession is affecting a broad range of industries. In economic news, U.S. housing starts and building permits both fell to record lows in December, the government reported. A separate report showed that weekly jobless claims rose to a 26-year high last week. Light sweet crude oil for March delivery rose 12 cents to $43.67 a barrel on the New York Mercantile Exchange. The contract rallied in the morning, plunged at midday after the U.S. government reported bigger-than-expected increases in crude and gasoline inventories, then recovered in the afternoon. The U.S. dollar gained versus the euro and fell versus the yen. The Dow Jones industrial average fell 105.30, or 1.3 percent, to 8,122.80. Bank of America shares lost 14 percent amid criticism of Thain's management of Merrill Lynch, which was acquired by Bank of America a month ago. Citigroup shares fell 13 percent. The broader Standard & Poor's 500 index fell 12.74, or 1.5 percent, to 827.50. The technology-heavy Nasdaq composite index fell 41.58, or 2.7 percent, to 1,465.49. Microsoft said it will cut up to 5,000 jobs over the next 18 months due to the impact of the recession. The software giant also reported lower quarterly profits that missed estimates. Its shares fell 10 percent. Online auctioneer eBay reported lower quarterly profit that surpassed estimates, and its shares fell nearly 13 percent. Apple reported higher quarterly sales and profits that beat estimates, and its shares rose 8 percent. The New York Stock Exchange composite index fell 102.31 to 5,171.68. The American Stock Exchange composite index fell 18.12 to 1,339.30. And the Russell 2000 index fell 13.91 to 442.85.
